Two wine industry conferences happened these past few months—the Wine Industry Financial Symposium, and WIN Expo. Presentations at these conferences, along with some well-researched industry reports, paint a challenging picture for wineries going into 2019.

“A 31% Increase In Number Of California Wineries Makes Financial Success That Much Harder”

That was the headline of a Forbes article earlier this month highlighting the Wine Industry Financial Symposium, along with Rabobank’s November 2018 Wine Quarterly. The article makes clear that increasing competition is putting more pressure on wineries, with 58% of large wineries and 40% of small wineries seeing “…brand proliferation as a drag on revenue and profitability.”

Another theme that came out of these conferences is the tough position tasting rooms are in as a channel for wine sales, especially given that competition.

It’s a fact that the top two distributors now handle the majority of all U.S. wine sold, and they have nearly 2000 wines in their portfolio. It’s hard to stand out in your field with competition like that.

And there’s where the challenges start. For one thing, overall visits to wineries have dropped. The wildfires surely had a large hand in this. But there also is a small but growing backlash in Napa and Sonoma against wine tourism. (Napa, for example, is going to tighten code enforcement against wineries that exceed a certain number of visitors in a day.) Consumer behavior is playing a role, too: People are spending more time in tasting rooms but visiting fewer per day, reducing the total number flowing through a tasting room on a given day. And there are looming fears of a recession, too.

We will mention that both Tammy Boatright and Sandra Hess took part in a great panel at WIN Expo. They and others shared their research showing the distinction between tasting rooms and wine clubs that performed beyond the average, and those that didn’t, because of their level of commitment to staff training. We suspect that wineries investing in more training will find themselves edging out the competition in 2019.

Still, if we know what those expectations are, we can work to manage them. For example, customers want easy access to their purchase history, personalized recommendations, engaged staff (in the tasting room), and better communication via email (for wine shipments). Wineries that learn how to incorporate digital tools into their purchasing experience will build better experiences for the customer, and ultimately stand out from the competition. (We note that many of these features were mentioned by Andrew Kamphuis in our recent interview with him on this blog.)

We predict that more and more wineries are looking to create “white glove service” for their tasting rooms, their online sales channels, and their final-mile deliveries. That seemed to be a common theme underneath much of what was being said at these two conferences, and it will continue to be a guiding vision for wineries in 2019.